LY (OTCMKTS:YAHOY – Get Free Report) and Macy’s (NYSE:M – Get Free Report) are both consumer discretionary companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, dividends, analyst recommendations and valuation.
Analyst Ratings
This is a summary of current recommendations and price targets for LY and Macy’s, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| LY | 0 | 2 | 0 | 0 | 2.00 |
| Macy’s | 2 | 9 | 2 | 0 | 2.00 |
Macy’s has a consensus target price of $22.78, suggesting a potential upside of 0.09%. Given Macy’s’ higher possible upside, analysts clearly believe Macy’s is more favorable than LY.
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| LY | $13.53 billion | 1.59 | $1.28 billion | $0.39 | 15.97 |
| Macy’s | $22.62 billion | 0.26 | $642.00 million | $2.73 | 8.34 |
LY has higher earnings, but lower revenue than Macy’s. Macy’s is trading at a lower price-to-earnings ratio than LY, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares LY and Macy’s’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| LY | 6.24% | 5.49% | 1.80% |
| Macy’s | 3.29% | 13.21% | 3.83% |
Volatility and Risk
LY has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500. Comparatively, Macy’s has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500.
Institutional and Insider Ownership
87.4% of Macy’s shares are held by institutional investors. 1.1% of Macy’s shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Dividends
LY pays an annual dividend of $0.10 per share and has a dividend yield of 1.6%. Macy’s pays an annual dividend of $0.77 per share and has a dividend yield of 3.4%. LY pays out 25.6% of its earnings in the form of a dividend. Macy’s pays out 28.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Macy’s has increased its dividend for 4 consecutive years. Macy’s is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Macy’s beats LY on 11 of the 16 factors compared between the two stocks.
About LY
LY Corporation engages in the online advertising and e-commerce businesses in Japan. The company provides LINE, a communication app; and Yahoo! JAPAN, an internet service that offers search, news, weather, shopping, auction, and other services. It also offers reuse, membership, and payment-related services. The company was formerly known as Z Holdings Corporation and changed its name to LY Corporation in October 2023. LY Corporation was founded in 1996 and is headquartered in Chiyoda, Japan. LY Corporation operates as a subsidiary of A Holdings Corporation.
About Macy’s
Macy’s, Inc. engages in the retail of apparel, accessories, cosmetics, home furnishings, and other consumer goods. The firm’s brands include Macy’s, Bloomingdale’s, and Bluemercury. It offers men’s, women’s, and children’s apparel, women’s accessories, intimate apparel, shoes, cosmetics, fragrances, as well as home and miscellaneous products. The company was founded by Rowland H. Macy in 1858 and is headquartered in New York, NY.
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